ADP pace slows, still demand for more funds

The implementation rate of the government’s annual development programme (ADP) fell 6 percentage points in the first eight months of the current fiscal year compared to the same period a year ago.

Despite the fall in the ADP implementation rate, ministries and divisions are now pressing for more allocation, reports the Daily Star.

adpThe National Economic Council at a meeting on April 3 will decide whether additional allocation will be made to them, an official of the planning ministry said.

The ADP spending was Tk 25,218 crore during July-February, which is 38 percent of the total allocation of Tk 65,872 crore for the current fiscal year, according to the Implementation, Monitoring and Evaluation Division.

The implementation rate was 44 percent of the total allocation during the same period last fiscal year.

Ten large ministries and divisions spent on an average 36 percent of their total allocation.

Utilisation of foreign funds was also low, only 40 percent of their total allocation, against 49 percent in the same period last fiscal year.

On the advice of Finance Division, the planning ministry has prepared a draft revised ADP of Tk 54,000 crore in the face of a low ADP implementation rate and a fall in revenue collection.

However, the planning ministry official said around Tk 7,000 crore would be needed to accommodate the additional demand for money from various ministries and divisions.

The ministers and secretaries concerned have already sought the additional money from the planning ministry, which has forwarded the plea to the Prime Minister.

The official said the PM has not yet responded to the demand but the Finance Division last week held two meetings with planning ministry officials to look into whether the demand for additional allocation was logical.

The demand has put both the planning ministry and the Finance Division in a complex situation. If additional allocation is made as per the demand, budget deficit will widen amid a revenue shortfall, a finance ministry official said.

However, the planning ministry is still hopeful that the PM like last year may increase some allocation in the revised ADP.

Among large ministries and divisions, the Road Division spent Tk 1,276 crore in the first eight months of the current fiscal year, the amount being 40 percent of its total allocation of Tk 3,154 crore.

Its allocation could be Tk 3,218 crore in the revised ADP.

The Power Division spent 33 percent or Tk 2,882 crore of its total allocation of Tk 8,756 crore during the period. It may get Tk 7,724 crore in the revised ADP.

The health ministry was able to spend 44 percent or Tk 1,553 crore of its total allocation of Tk 3.560 crore. The allocation of the ministry may be Tk 3,922 crore in the revised ADP.

It has become a tradition that ministries spend less in the first half or so of the fiscal year and expedite spending in the last two months, said Zaid Bakht, research director of Bangladesh Institute of Development Studies.

As a result, the probability of wastage of resources is high, he said, adding that the ministries always seek more allocation be they are able to spend the amount or not.

He said this time it will be difficult to give allocation as per their demand as revenue collection is low.

Bakht said, if allocation is made despite low revenue earnings, bank borrowing will increase which will at the end fuel inflation.

Instead of making small allocations to more new projects, the projects nearing completion should be given more money, he added.